China has asked several domestic steel mills and traders not to buy any new, US dollar-denominated cargoes of super special fines - Bloomberg News

China has instructed domestic steel mills and traders to suspend new purchases of U.S. dollar-denominated iron ore cargoes from BHP Group Ltd, according to Bloomberg News. The directive, reportedly issued by China Mineral Resources Group (CMRG), affects super special fines and other grades of iron ore, marking escalation in the pricing dispute.

The move follows months of stalled negotiations over contract terms, with BHP favoring annual pricing linked to the 2024 Platts average and Chinese buyers pushing for quarterly pricing tied to lower spot levels. CMRG, established in 2022 to consolidate China’s iron ore procurement, has previously restricted imports of BHP’s Jimblebar fines and now appears to be broadening the scope of restrictions.

While steel mills have not yet received explicit permission to accept physical deliveries from BHP, sources suggest that a formal notice may be issued soon. The decision has already impacted shipments at major Chinese ports, with vessels carrying BHP iron ore being held back from clearance.

This development adds to growing concerns over China’s efforts to shift power dynamics in the global iron ore market, particularly as it seeks to reduce reliance on dollar-denominated pricing. Meanwhile, Chinese steelmakers are increasingly turning to alternative suppliers, including Brazilian and African producers, to diversify their sources.